STEEM Does Not Have A Whale Problem: But There Is A Problem!!!
In my continuing series of situations that people complain about that are working themselves out, I came across a comment on Telegram where someone posted about taking care of the "Whale problem on STEEM".
I was thinking to myself, what Whale problem?
Yeah, I know people like to complain about the Whales.
They are so uncaring.
They only circle vote themselves.
They are investors and only care about money, not STEEM itself.
Ironic, people complain about the investors when they are the reason this place is here. In fact, isn't it interesting that every application that is on here is looking for investment money. People need to realize that for technological advancements to take place, someone needs to invest money to fund the development.
That said, the biggest issue people have is the distribution of SP. For some reason people think that there should be a distribution different from what it is. This is an unrealistic viewpoint in my opinion. New projects place the power in the hands of a few and then it should work outward.
The bottom line is that thinking that the distribution of STEEM awry is inaccurate. In fact, my research leads me to the conclusion that STEEM is progressing nicely in this department.
Let us take a look at a few examples.
Bitcoin's largest wallets have over 60% of all the tokens. This amounts to about 16,500 wallets having the majority of the wealth. It gets even more pronounced when you see under 150K wallets out of the nearly 25M controlling 87% of the wealth.
This is after almost a decade that Bitcoin is around.
BCash has more than 50% of the tokens in 1849 wallets. Going further out, over 90% of all BCash is in the hands of roughly 120K wallets. There are a little over 7M wallets.
This is a little over a year old but the tokens were airdropped on Bitcoin holders, so this is not a great surprise.
Litecoin is even worse. This token has 85% ownership in roughly 36K wallets. Founded in, I believe, 2011, this token is 7 years old.
We must keep in mind that STEEM is a little over two years old. Distribution is something that @dan mentioned over the years in some of his writings. I won't go into the speculation that some have posted since I was not around but the almost year long ICO of EOS was in an attempt to get the tokens spread out more.
How did EOS do?
Following consensus across six independent snapshots verifying the state of EOS ownership, data crunching has revealed only 10 addresses hold 496,735,539 EOS tokens or 49.67% of all one billion EOS tokens.
The top 100 EOS addresses hold 748,176,831 tokens, amounting to 74.82% of all tokens. Otherwise said, the next 90 top addresses hold 250 million tokens, accounting for 25%.
After the longest ICO ever to take place, 100 accounts own just shy of 75% of all the tokens. Thus, once again, it is shown that new projects have the power start out in the hands of a few.
The difference is that with both STEEM and EOS, I do not expect the present distribution to persist like it in over the next few years. One major advantage that STEEM, and I presume EOS, has is that tokens are awarded daily to people for providing content. The system that is in place allows for new tokens to get into the hands of smaller accounts. Try doing that with Bitcoin.
In my post about this topic the other day, I did a comparison of how things are changing. Over the last 13 months, we see a serious shift in spite of the slow sign up process which has kept the active participation rate down.
Here are the changes by percentage (By SP then by Number of Accounts) over the last 13 months.
Whales -20.58% -14.29%
Orcas +22.21% +25.66%
Dolphins +67.36% +52.65%
Minnows +199.06% +77.62
Red Fish +22800% +174.95%
Inactive +447.50% +321.11%
To see what this looks like visually:
The long and the short of it is that STEEM is no different than any other platform. The distribution is askew since we are so new. Over time, because of the way the reward system is set up, tokens will end up in other accounts.
However, there is a major problem on STEEM that few want discuss. It is a rather simple one. Roughly 10K accounts are Minnow or higher in terms of the SP they hold. Look at this chart and see if you can see what is so interesting about it.
The major problem on STEEM is the drop in users. At the beginning of the year, there were 40K authors; now about 12K. That is roughly a 70% drop in posting rates. Considering the fact that authors take 75% of the reward pool AND, according to @dragosoura, it is at an all-time high in terms of the SP distributed each week, here we find the crux of the problem.
What would the distribution changes looked like of the other 28K people kept posting the last 6 months or so instead of pulling away? Certainly, there would be more people in the Minnow category which would have bumped that impressive growth even more.
Ever since I started following the charts posted by @arcange, I have espoused that posting is the key. Many took exception with me, stating that what I was talking about was not correct. I presume most of who were disputing me are part of the 28K who left. The answer is simple: Post; Comment; Upvote.
Instead of focusing upon the "Whale Problem", why not focusing upon posting 3-4 times a day (with the apps on here now, that is a piece of cake for a smaller account); leave 10 thought out comments in articles that get your attention, ones that show you read the article. This will get you a following.
The distribution is shifting even in the state we are in right now. Improving the sign up process will take care of a lot more since we should see a ton of people starting to come on and engage via the different apps being created. This will start putting more SP in their wallets which will spread the tokens out to an even greater degree.
And that is how it is suppose to work.
If you found this article informative, please give it an upvote and resteem.
Please visit the blog of @arcange to see more information that he compiles on a daily basis regarding the happenings on the STEEM blockchain.